At first glance, it seems to be an odd proposition. How can saying ‘No’ to customers improve a small business? Several weeks ago I attended Podcamp Halifax, which is a conference for small business owners discussing various ways to improve their business. One presenter explained the premise that saying no to customers can really help a business grow. Most business owners understand this principle, but it is interesting to take a more in-depth view. Note that the examples below are most relevant to consulting or project-based businesses, but it is applicable to most other businesses as well, with some tweaking of course.

Reasons to Say ‘No’ to Customers

Increased Focus – Saying no to more customers allows you to focus on the projects and services which you are best at.

Increased Happiness – Saying no to more customers allows you to focus on the projects and services which you enjoy the most.

Increased Referrals – Performing more of your best and most enjoyable work increases the odds that clients will be impressed by your services, increasing the likelihood of a referral. Additionally, your referrals will become more and more focused toward the work you do best, since people will eventually stop referring the type of work which you continuously turn down.

Increased Profitability – Focusing on the projects and services which you are best at means that you are more efficient, thereby taking less time to complete projects. In essence, you effectively give yourself a raise. Consider two projects. Project A produces $2 000 worth of profit taking 100 hours to complete. Project B produces $1 000 worth of profit and takes 20 hours to complete. Which project is more desirable? The table below outlines how Project B is more than twice as profitable per hour worked!

Recently, I made a business decision to turn down a project worth $3 500. My reasoning for turning the project down was because it was too far outside my business strategy. I was capable of performing the work, but it was not my specialty. I would have taken a long time to stumble through the project resulting in a very low profit per hour. I reasoned that it was not worth taking the time to learn these skills since it was not the direction I wanted to take my business.

Now it’s time to tell your story. Have you said no to a project in order to remain profitable? Or maybe in hindsight, you should have said no to a project because it turned out not to be profitable? Either way, we’d like to hear about it. Leave your comments below!

What is a business plan, and why do you need one?

A business plan is a written statement that describes the nature of a business, target market, advantages the business will have in relation to competition, and the resources & qualifications of the owner(s). (Nickels, McHugh, McHugh, & Cossa, 2007) While the business plan details past and present ventures, its primary focus should be the future plans of the business.

A business plan should ideally be developed as the business transitions from an idea to reality. Alas, many companies are already operating without a documented business plan. That’s ok! The business creator has likely undergone some form of mental business planning, or even performed some analysis to help with their business decisions. This leads us to the second question you might be asking yourself, “If businesses can be successful without a business plan, why go through the hassle of creating one?”

Well, those ‘successful’ businesses would probably be even more successful had they developed a business plan. There are several reasons why all businesses should develop a business plan, whether they are in start-up or have been operating for 50 years.

Four reasons why every business should have a business plan

Business plans are necessary for talking with bankers and other investors.

Business plans help you to take advantage of opportunities and mitigate risks.

Business plans help you focus, in a logical and organized manner, on the strategy for future growth of your company.

Developing a business plan ensures that both market research and financial analysis be performed.

By reviewing the above list, it is clear that some preliminary work be performed prior to completing a business plan. This is critical. While the final document does have some value, it is the thinking process that is undergone while creating a business plan that is most valuable. While business plans are not a be all and end all solution to a business’s problems, they will certainly help a great deal. As Harvey Mackay once said, “If you fail to plan, then you plan to fail”. I couldn’t agree more.

You should now be convinced that developing a business plan is probably a good idea. However, you may still be hesitant because you are unsure how to go about starting. Let me briefly explain how to get started, what the process involves, and where to find additional resources.

To start, there is no such thing as the perfect business plan. People may be intimidated to start a business plan for fear that it may take too long or they may not ‘do it right’. Remember that a great final document is not the final goal here. A business plan can be considered a formal process that ensures that each main factor affecting your business is considered with sufficient depth so as to gain more knowledge of the company.

So, what does the business plan need to cover?

Every business plan should include the following sections (if applicable)